Homebuilder sentiment improved in December to its strongest since April 2006, the National Association of Home Builders (NAHB) said on Tuesday.

The NAHB/Wells Fargo Housing Market index rose to 47 this month from a revised 45 in November, the group said in a statement. Economists polled by Reuters had predicted the index would be 47.

Readings below 50 mean more builders view market conditions as poor than favorable. The index has not been above 50 since April 2006.

"Builders across the country are reporting some of the best sales conditions they’ve seen in more than five years, with more serious buyers coming forward and a shrinking number of vacant and foreclosed properties on the market," observed NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. "However, one thing that is still holding back potential home sales is the difficulty that many families are encountering in getting qualified for a mortgage due to today’s overly stringent lending standards."

NAHB Chief Economist David Crowe added: "While there is still much room for improvement, the consistent upward trend in builder confidence over the past year is indicative of the gradual recovery that has been taking place in housing markets nationwide and that we expect to continue in 2013."